The views expressed in these remarks are those of the speaker in their role as Deputy Secretary General of the Financial Stability Board and do not necessarily reflect those of the FSB or its members.
Thank you, Katie-Ann for setting this up. It’s very timely. I’m hoping that by making some slightly extended opening remarks I can give you all a sense of what is on our mind and that my fellow panellists can then add further to inspire our audience to be part of a debate over the next year that I think we really need.
Let me start by recalling that it was in 2020, that the G20 launched our Roadmap. The goal that has now become something of a mantra; it was “to make cross-border payments faster, cheaper, and more transparent and inclusive”. It rolls off the tongue, but making it a reality has proven challenging.
We understood from day one that this was going to be difficult. To calibrate the ambition and to create a degree of accountability, in 2021, we asked the G20 to endorse a set of global quantitative measures, most of which are set for end-2027. And those quantitative measures of what we are trying to achieve tell us we still have a way to go.
With the end of the Roadmap approaching, we have the opportunity to reflect on what we have achieved so far and what further steps would be helpful. And it’s not just for us in the FSB to ask those questions. I think it’s for every other stakeholder as well. We still have work to do under the current Roadmap, which we won’t get distracted from. But I think it is time to ask all our stakeholders to begin thinking about the lessons that can be drawn.
I also suspect the history of the Roadmap is full of lessons for us. The simple fact that we have had to update and reset the Roadmap a number of times is itself striking. This is not plain sailing.
To start the discussion, let me point to a number of reasons which seem relevant to why we are where we are:
The first challenge has to do with market structure and incentives: people will have different views, and payment specialists of course think their work is the most important in the world. But cross-border payments are somewhat marginal to the business model of most of the companies which provide this service. Furthermore, the sense in which there is a traditional competitive market driving quality and innovation is limited, because those markets are complex. Indeed, each major corridor sometimes seems to behave like its own market, with distinct frictions. Regions appear to behave differently from each other. And so on. We talk about global cross border payments, but its more complex than that phrase suggests.
Secondly, we face what I might call ‘exogenous dependencies’: for example, it has become clear that cross-border payments rely heavily on foreign exchange markets which are the largest markets in the world and outside the remit of our roadmap.
Thirdly, technology adoption dynamics are obviously important in cross border payments: we are constantly told that there is immense technological potential for efficiencies and new services; but it remains a fact that the market is dominated by participants who often appear to be seeking second- or even third-mover advantage.
Finally, the necessary political and regulatory authority is widely distributed: there is no global authority with a mandate to make this work well. Even at the domestic level, there is often limited effective coordination. Importantly, the issue cuts across the sensitive division of responsibilities between central banks and finance ministries. At the same time, there are many global standard setters and organisations with an interest. We have tried to work with all of them.
Adding all that up amounts to a real challenge for policy makers. On the one hand, it seems, we may not be able to rely as much as we hoped on competitive markets to resolve issues, even if we do everything we can to make space for competition to work as well as it can. On the other hand, we haven’t got well established global authorities to direct change. Neither the visible nor the invisible hand seems to have a strong grip on this issue.
But it is far from hopeless. Why do I say that? I suspect the FSB back in 2020 did something important in trying to find a way through these challenges. When we set up the Roadmap, we bought into an important simplifying idea: use the FSB’s convening power to smooth out as many as possible of the regulatory and policy impediments to see if market dynamics to improve cost, speed, transparency, and access. We have done that. It was important to do it. The thought was ‘let’s test what competition can achieve’.
As we move towards 2027, however, we now have to ask the difficult question of what the results are telling us about that approach. Has our focus on removing frictions been sufficient? Should we double down on it? Should we pivot to operational planning such as we are currently testing with the jurisdictional and regional action plans we are working on? Or should we step back and just let the technology innovators lead?
Turning to technology innovators first, a much talked about option is whether stablecoins could be the silver bullet. Let’s just remember the numbers. There are varying measures of the volume of cross-border payments, but let’s just say total payments in 2024 were at or around USD 200 trillion. In contrast, the volume of cross-border payments being made by stablecoins is estimated to be only a fraction of this – by some estimates less than 0.2 per cent of total cross border payments in 2025. The order of magnitude tells a clear story: today, stablecoin volumes remain a very small share of total cross-border flows. There is some evidence of exploration of large financial institutional use cases. Their most immediate value may be as components in hybrid models – integrated with bank money and interoperable FX/settlement – rather than as stand-alone global rails. But neither is more than a possibility at this point.
Turning to our work to reduce frictions. The work has not just been about getting better policy frameworks, it has also been about technical frictions. Let me spend a moment on that. Poor data quality and limited standardisation of data exchange make cross-border payments more complex to process, in turn affecting their speed, price and transparency. Promoting the adoption of common message formats, including conversion and mapping from legacy formats and the use of Legal Entity Identifiers and common protocols for data exchange, does mitigate the frictions.
When ISO 20022 was first introduced in 2004, it marked the beginning of an important journey toward a new era of simpler, more data-rich payments for banks and their customers. One of the original building blocks of our Roadmap in 2020 (building block 14) was adopting ISO-harmonised message formats. Twenty plus years after the original version of the ISO standard, we are at 77% of fast payments systems and 53% of real time gross settlement systems reporting implementation of the messaging standard.
This is good. But it has taken very long time and it’s not complete. Without the extensive work of CPMI, I suspect what has been achieved, would not have been achieved. We also know that implementation is necessary but not sufficient. The value of the ISO standard comes from consistent usage, ensuring rich data and embedding the standard into end-to-end operations; for example, screening, reconciliation, fraud analytics and supervision, not just message conversion.
Extensive efforts here have undoubtedly made a difference. But to fully realise the potential benefits of the ISO standard, continuous development is needed to align the messages to evolving market practices and embed them into operations. For example, whilst ISO 20022 includes enhanced data elements that can strengthen Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) measures, a recent study found that many financial institutions continue to rely on traditional screening methods developed for payment messages. ISO 20022 carries more data than legacy messaging formats, so banks could use it to create a fully integrated payments experience, giving them an end-to-end view of operations from initiation and delivery of the payment to exceptions, investigations and reporting. But this requires a pretty large investment.
Our work has also highlighted other challenges where we have sought to promote better practices, but we continue to hear about issues:
- Data sharing to fight fraud;
- Smooth processes where capital controls exist;
- Efficient ways to do sanctions screening;
- How foreign exchange access restrictions work;
- Payment versus payment coverage;
- Opening hours;
How do we get from identifying frictions to global implementation of solutions to those frictions? One of our key reflections is about leadership and regional organisation. This is an area that the International Monetary Fund and the World Bank have done a lot of work on. Don’t jurisdictions need to carefully assign responsibility, and don’t regions need effective regional cooperation structures?
Conclusion
My overall view is this: we are coming to the end of the Roadmap, but not yet the end of the journey. The Roadmap’s goals surely endure? Perhaps the lesson of recent years is that coordination is proving to be the scarce resource.
So, as we look beyond 2027, the question is not simply what we do next, but how we choose to organise ourselves to do it. Is continued friction-removal enough to unlock better outcomes, or do we need corridor-by-corridor or region by region operational plans with clear ownership?
If neither path is sufficient on its own, what blend would be credible and politically sustainable across jurisdictions?
How far should we push standardisation or integration without eroding domestic policy options or privacy protections?
As technology evolves, should stablecoins and tokenised deposits be complements within integrated models, or catalysts for new rails?
Who will be the champions of a second Roadmap?
And finally, what should success look like after 2027 – not just in metrics, but in lived experience for people and companies in every region? Maybe speed, cost and transparency are not all equally important to end-users?
I think we need the help of every stakeholder in the system to reflect on where we are and what we should achieve, to convene discussions, to send us submissions to engage with us and each other to make sure a further Roadmap really drives forward to substantive change.
I hope to hear a lot more on these questions today and over the coming months. Thank you for giving me the time to set out those thoughts.